Visual contracts

Visual contracts

According to a survey by the International Association of Contract and Commercial Management (IACCM), only one in ten people find contracts “easy to understand”. And a mere 17% are satisfied with the contract process.

Little wonder then that some people view contracts as a necessary evil, sign on the dotted line without reading them properly, and hope for the best. Contracts with dense, hard-to-understand language increase the risk of misunderstandings and different interpretations of the same stipulations. This can lead to dashed expectations, unhappy partners, and open up the potential for disputes and litigation.

Recent years have seen something of a revolution in contract design. Principles of “user experience” or UX, relationship, and trust-building have made their way into the utilitarian legal sphere. Plain-language advocates have pushed for changes for years. But even more recent is the rise of visual contracts.

What is a visual contract?

Visual contracts use design elements to improve user experience, a term that has slowly made its way from the world of computer systems design into the legal arena. The end goal is to make contracts easy to understand, convenient to read, and accessible for people who lack legal training.

Who are visual contracts for?

A recent form of visual contract that has captured much interest is the “comic contract”, designed for users with language or access needs. One inspiring example is Creative Contracts’ work on employment contracts for South African farm labourers – there’s more about that in an upcoming article, so stay tuned.

But are visual contracts only for users with low literacy levels or access needs? The simple answer is no. Visual contracts are for everybody from all walks of life, and in all areas of society, from farmworkers to students, corporate clients to executives… and beyond.

Companies like Shell and Airbus have started to use visual contracts for B2B transactions, a step that should pave the way for greater takeup in the corporate world.

Shelling out for visual contracts

Shell’s marine and aviation division first looked into visual contracts in 2017. Their account managers understood the value of creating strong customer relationships and realised that future contractual negotiations could “dismantle that relationship brick-by-brick”.

Here’s an example from one of Shell’s visual contracts:

Design: robwaller.org

This example outlines the risk associated with bulk lubricant deliveries. Note the use of red and grey colour blocks to delineate where one party’s risk ends, and the other party’s risk begins. Words can be open to interpretation, but these visuals leave little doubt about where the users’ risks lie.

This was part of Shell’s recent shakeup of how they handle contracts. At a conference in 2018, its lead global counsel praised plain-language contracts: “The business loves it and feels empowered. It changes how the legal team is perceived. The plan is to roll out plain English contracts in three other material businesses”.

Where companies like Shell lead, others will surely follow.

Exploring the world of visual contracts

World Commerce & Contracting (WorldCC) is a global nonprofit organisation championing better contracts for better business and a better society. It sees contracts, rightly, as crucial legal instruments; but knows that most contracts are “written by lawyers for lawyers”.

WorldCC promotes contract design that can be easily read and understood by their intended parties, not just legal professionals.

To WorldCC, complex contracts create “additional risk and costs” for organisations and affect how those organisation’s partners perceive them; they describe contracts as “core business-critical economic instruments with a range of diverse purposes”.

This is a big part of the rationale behind visual contracts.

Pioneering Visual Contracts

Visual Contracts is a legal design consultancy founded in 2017 by Dutch designer Lieke Beelen. She had worked before that with a lawyer to design plain-language contracts and wanted to make contracts more comprehensible and accessible for all, regardless of background or experience.

For Beelen, visual contracts are about fusing the worlds of legal, tech, and design. Besides smoothing the flow of commerce, shortening negotiation time, and cutting down on legal costs through easily accessible contracts, there are wider benefits that visual contracts can bring.

These include empowering users by outlining their rights and responsibilities, increasing access to justice, supporting labour relations, and contributing to “an equal, inclusive, and just world”.

Signing an Airbus NDA

In 2020, Airbus partnered with Visual Contracts to redesign their NDAs for collaborating with startups based on the understanding that startups often lack the legal personnel needed to handle such agreements. They wanted to foster an environment of trust and mutual understanding to enable smooth-running, reciprocal, and productive relationships with smaller companies.

The result was a “restructured, shortened and simplified NDA including explanations of legal expressions for people without a legal background”.

By redesigning just one contract, Airbus could build trust using transparent, easy-to-understand NDA contracts so that “users felt understood and taken seriously as a business partner”.

Rethinking contract design

The rise of visual contracts marks a sea-change in how modern law firms conceptualise contracts. They increasingly understand that contracts need to set up all parties for success, ensure everyone is on board with the new relationship, and support them to contribute to this relationship in the most positive and constructive way. Visual Contracts describes their work as “proactive visual contracts”, ensuring sustainable, conflict-free relationships.

Plain language goes hand in hand with visual contracts. Both give legal drafters scope to simplify, empower, and nurture at a time when these qualities are more vital than ever.

So, if you’re a lawyer or legal designer keen to explore how teaming up with a plain-English specialist could help you and your clients, contact me. Let’s do our bit for a more inclusive and fairer society together!